Council tax set for freeze
Test Valley Borough Council’s cabinet recommend a council tax freeze for 2019/20 at its meeting on February 13.
The decision comes off the back of the positive performance of the council’s Project Enterprise (PE) initiative, which the authority established back in 2014 to increase its income from investments and reduce its reliance on government funding. This increased income has successfully offset some of the reduction in central government funding, enabling the authority to avoid leaning on taxpayers to sustain and grow its services.
Since 2014, the council has invested in a number of properties through PE that have sought to generate additional revenue income. This additional income has been generated by investing the cash reserves held by the council in projects that will yield greater returns than the current investment portfolio. Net rental income from these investments is forecast to be £2.009M in 2019/20. This represents an average return on investment of 7.3 per cent.
For 2018/19, the council is anticipating an income from PE investments of £1.958M, which equates to an annual return on investment of 7.1 per cent.
The amount of investment in completed projects is currently £27.479M.
Finance portfolio holder, Councillor Peter Giddings, said: “I am pleased that we are in a position to freeze council tax this year, largely as a result of the success of the
Project Enterprise initiative and the council taking a far more entrepreneurial approach to managing its finances and generating income. Despite reductions in the money we get from central government our council tax remains one of the lowest in the country and is £43 lower than the average in the rest of England.
“Project Enterprise has been a great success so far and we will continue to build on that success over the coming years. The financial picture looks ever more challenging for local authorities but we are ready to meet that challenge and our ambition is to thrive rather than simply survive.”
In contrast to its income from PE, the council’s cash investment portfolio is forecast to generate an average return of 0.86 percent in 2019/20. Had the council not purchased the additional properties and left the investment in cash reserves, this would be expected to generate £236,300 in 2019/20. Income from PE investments is therefore expected to be £1.772M more than would have been achieved by retaining the balances in cash.
The final decision to grant the council tax freeze will be made at the full council meeting on 25 February.